1 prior probabilities refer to the relative likelihood of


1) Prior probabilities refer to the relative likelihood of possible states of nature.

2) A decision tree branches out all of the possible decisions and all of the possible events.

3) The EVPI indicates an upper limit in the amount a decision-maker should be willing to spend to obtain information.

4) The maximum likelihood criterion ignores the payoffs for states of nature other than the most likely one.

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